Cross-Blockchain Secure Transactions

Cross-Blockchain Secure Transactions

Glossary

Term DefinitionsBlockchainA decentralized distributed ledger that records transaction data and guarantees its security and immutability through cryptography. Tokens represent digital assets of a certain value on the blockchain and can be used for transactions, payments, etc. Bitcoin (BTC)A decentralized digital currency based on blockchain technology that can be traded without a central bank or third-party institution. Ethereum (Ethereum)An open source smart contract platform that allows developers to build and deploy decentralized applications (DApps). ERC20A token standard on the Ethereum blockchain that defines the basic functions and interfaces of tokens. DBTC/BOEAn ERC20 token that is anchored to the value of Bitcoin and allows users to use Bitcoin on the Ethereum blockchain. Smart ContractsA self-executing contract stored on the blockchain whose terms are written in code and automatically executed once the preset conditions are met. MultisigA mechanism that requires multiple users to authorize the execution of a transaction, which can improve security. Pay to Script Hash (P2SH)A special type of Bitcoin transaction that allows Bitcoin to be locked into a script and can only be unlocked if the script conditions are met. Unspent Transaction Output (UTXO) An unspent output in a Bitcoin transaction that can be used as an input for subsequent transactions. Raft A distributed consensus algorithm used to ensure that data on multiple nodes is consistent. Validators Nodes responsible for verifying transactions and maintaining the security of the blockchain network. D-Token Deluge Network's native token, used to reward validators and users. BTC Relays an Ethereum smart contract that can verify whether a Bitcoin transaction has occurred. Merkle Root A hash value that summarizes all transactions in a block and can efficiently verify whether a transaction exists.

Short Answer Question

What is the role of DBTC? How is it related to BTC? DBTC is an ERC20 token that anchors the value of BTC and allows users to use BTC on the Ethereum blockchain. The value of DBTC is maintained at a 1:1 ratio with BTC.

How does Deluge Network ensure the security of cross-blockchain transactions? Deluge Network uses multi-signatures and P2SH addresses to lock BTC and leverages a network of validators to reach consensus to ensure the security of transactions.

Briefly describe the import process in Deluge Network. The user sends BTC to the Deluge wallet, which generates a corresponding BTC and Ethereum address pair and locks the BTC to a P2SH address. After the smart contract verifies the transaction, an equal amount of DBTC is generated on the Ethereum blockchain.

Briefly describe the export process in the Deluge Network. The user destroys DBTC in the Deluge wallet, triggering the export process. The validator network verifies the destruction event and signs the original Bitcoin transaction with its private key. The Deluge wallet collects signatures and builds a multi-signature transaction to unlock the BTC to the user's Bitcoin address.

What role does the validator play in the Deluge Network? Validators are responsible for verifying transactions, maintaining UTXO lists, signing export transactions, and participating in network governance.

What is the purpose of the Raft consensus algorithm in the Deluge Network? The Raft consensus algorithm is used to ensure that the UTXO lists on all validator nodes are consistent.

What is the purpose of D-Token? D-Token is used to reward validators and users and can be used for network governance.

What is the role of BTC relay? How does it work? BTC relay is an Ethereum smart contract that verifies whether a Bitcoin transaction has occurred. It stores Bitcoin block headers and uses Merkle Root to verify transactions.

What is the function of the Deluge Wallet? The Deluge Wallet is the entry point for users to interact with the Deluge Network, allowing users to import, export, and manage their BTC and DBTC assets.

What fees do users need to pay in the Deluge Network? Users need to pay mining fees for the Bitcoin and Ethereum networks, as well as transaction fees for the Deluge Network.

Essay Questions

What are the advantages of the Deluge Network compared to centralized exchanges?

Discuss how the Deluge Network solves common security issues in cross-blockchain transactions.

Analyze the Deluge Network's validator model and its impact on network security and performance.

Explore the future development direction of the Deluge Network, such as supporting more blockchains and tokens.

Evaluate the impact of the Deluge Network on the decentralized finance (DeFi) ecosystem.